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Southwest Airlines CEO Gary Kelly is warning his employees that high costs are a danger to the Dallas-based carrier, just as they were to the larger carriers that have filed for bankruptcy protection. Southwest will begin flying out of Dayton next year as a result of the merger with AirTran Holdings.

Lance Murray, Dallas Business Journal

Southwest Airlines CEO Gary Kelly is warning his employees that high costs are a danger to the Dallas-based carrier, just as they were to the larger carriers that have filed for bankruptcy protection, including American Airlines.

The Dallas Morning News reported that Kelly’s letter to Southwest employees said the company must rein in costs if it is to prosper.

“All the majors from 1989 have gone bankrupt. Pan Am. Eastern. Braniff. Continental. America West. TWA. US Air. United. Delta, Northwest. And now, America. Every single one failed,” Kelly said in the letter, the Morning News reported.

“Why? Not because of customer service, but because of high costs. Great customer service cannot overcome high costs. That is the imperative I wrote about a decade ago: low costs,” he wrote.

According to the Morning News, Southwest’s labor costs have risen nearly 32 percent to 3.94 cents per available mile, which is higher than for competitors Delta, United and US Airways.

Southwest Airlines will begin flying out of the Dayton International Airport next year as a result of the merger with AirTran Holdings. Recently, airport officials announced Dayton would get a new, non-stop daily flight from Southwest to Denver starting next June.

AirTran is the second busiest carrier at Dayton, with more than 210,000 this year through the end of October.

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